Will electronics' spark wane for Singapore's manufacturing output?

It registered high growth in May, up 35.1%.

Singapore industrial output’s only hope could turn out to be its bane in the coming months.

Whilst the industrial production expanded 5% y-o-y in the month, it was down from 6.7% previously, with the main drag continuing to be pharmaceuticals (-32.6%).

Excluding this weak link, overall output grew 13.1%.

"Whether biomedical is included or not, there are signs to suggest that the manufacturing rally has peaked. Indeed, the main story behind the latest set of numbers is that on a month-on-month (seasonally adjusted) basis, manufacturing output fell 3.5%," DBS Group Research said.

And whilst the industrial output finds comfort in the electronics sector, the support could gradually decline in the coming months.

"Moreover, while the electronics cluster continues to be the bright spark, the fact that there is marginal spill-over to the rest of the economy remains a concern," DBS Group Research noted.

It furthered, "We expect production growth to run sideways in the coming months before a more pronounced downward trend at the latter part of the year. Weaker consumer demand from China and a tighter monetary policy from the US would be some of the key reasons."